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This is a bit of a broad brush question, but bear with me please. On average, how many cars a month get you to a break even position, when you look at a year? I understand that there is a lot of monthly fluctuation in both buying and selling - the sort fo cars I am thinking about are small cars usually bought as a fiest car or a second family car, such as a Fiesta, sold for around 6-8k so no need for financing
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Try the Car Sales/Dealer Group on Facebook - you’ll have to show that you’re in the trade, but lots of knowledgeable people on there.
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How long is a piece of string? It’s impossible to answer this question without knowing what your costs of selling are. Do you have premises? Are you selling from home? Are you paying for warranties? Are you doing things by the book or is this a sideline to make a few quid on top of your job?
I had an auction account when I was trading but rarely bought anything there as 95% of it was utter garbage, there to be disposed of by the dealer who took it in part ex because it had something costly wrong with it or it had a dodgy history of sorts: I preferred to buy stock from a couple of decent family owned local dealers (both have sadly now closed) and by word of mouth from private individuals.
I stuck to stock under £3,000 as no would buy dearer cars from the driveway, I took a small margin and prepped the cars well. It was a sideline to my main business but brought in welcome additional revenue and my costs were low as I didn’t pay the now ludicrous auction fees (unless you’re buying hundreds of cars a year and can negotiate) and I didn’t have premises. I had a large drive in a nice areas with room for 6 cars plus my mothers large garage (much to her annoyance) and I paid for trade insurance and a set of trade plates. I warranties the cars personally as most aftermarket policies on cars this age were worthless.
Sadly the days of being a small time home trader are now gone. The small dealers who’ll sell you their older stock trade are largely gone, large chains won’t entertain traders and the likes of WBAC etc are making it too easy for people to sell their cars without hunting round dealers or selling on Autotrader etc, where I’d frequently pick up badly advertised local cars that had sat for a few weeks with desperate sellers.
I thoroughly enjoyed my time both as a salesman and buyer for a large multi site dealer and as a home trader, but I have no interest in trying it again nor would I recommend it to anyone. Cars are too complex, they’re too costly to fix and too unreliable plus rules are too strict and punters expect too much from even an old car. Auction fees are too high and stock for sale privately too thin on the ground. No one can guarantee a sub £2,000 car but those who buy them expect a new car warranty and the local trading standards will back them up with even the most ludicrous of claims.
But after all that my break even point was one car a month. All I needed to cover was the cost of trade insurance and the cost of a set of trade plates. One car a month more than covered that, but that might be ten cars a month for someone with premises or more with staff.
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Agree, unless you’re buying 50+ cars a month from the likes of BCA or Mainheim, your fees will be so expensive it will be difficult to compete on price.
Furthermore, anything good quality will be sent by WBAC to their network to sell on, only the older stuff or tatty issue cars go to the auctions.
Of course there is the odd good one, but they are the exception to the rule.
Lost of high mileage diesel insignias, battered Astras, worn out Citroens, etc is not going to result in a thriving business.
Look how long some of the small traders keep their company for, some intentionally go under every 2/3 years to rid them of past liabilities and claims.
Buying at the bottom of the market is difficult for the private buyer, 90% of the dealers will sell any old junk tarted up at often ridiculous premium percentages.
For example, my neighbours 11 plate Fabia diesel traded at £1,900 which he sold to WBAC is now up for £4,190 at an independent dealership.
Nice profit margin if you can get it. But who is insane enough to buy a high mileage Fabia diesel?
Interestingly, it failed the MOT with quite a few issues 2 weeks before it was due to run out, miraculously it’s showing a brand new MOT done last Friday. Although there is no evidence of welding to the drivers side arch, it looks the exact same.
The selling trader offers a 3 month ‘AU warranty’ whatever that is
If you’re going to trade at the bottom of the market, stick to one make or even one model.
Honda Jazz for example.
Build a reputation for selling good ones, with the issues sorted.
Stand by the cars you sell for 6 months.
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